By Lemuel Areglo, CPC | Director of Revenue Cycle Management Services
Key Takeaways
- Many neurology practices face a visibility gap rather than a billing crisis. If cash flow is inconsistent, the first step is identifying which performance metrics are lacking and by how much.
- Denial rates exceeding 10% are unacceptable. High-performing neurology practices maintain rates below 5% by implementing proactive measures and efficient appeals processes when denials occur.
- Claims should be submitted within 24 hours of patient encounters. Each day a claim is delayed adds to the overall payment timeline, affecting cash flow across all submitted claims.
- Monitoring relevant KPIs is essential for assessing the performance and efficiency of your billing operations.
If your neurology practice is tracking revenue cycle performance but still experiencing slow cash inflow, the issue often lies in a lack of visibility rather than effort. Most practices do not have a billing crisis; they have a measurement gap.
Here are nine key performance indicators (KPIs) that can be directly improved by professional billing services, along with realistic benchmarks and necessary changes to achieve them.
Table of Contents
How We Selected These Nine
Not every billing metric warrants your attention. We focused on those linked to tangible revenue, aspects that a billing service can control, and metrics applicable specifically to neurology practices. If it doesn’t impact cash flow, staff workload, or compliance, it didn’t make the list.
1. Days in Accounts Receivable
This metric indicates how long it takes to convert a patient visit into cash. High-performing neurology practices aim to keep this under 30 days. If your practice is exceeding 50 days, there are likely issues upstream, such as delayed claim submissions or insufficient follow-up on aging accounts.
The solution is straightforward: ensure same-day claim submissions, verify insurance eligibility prior to appointments, and actively monitor accounts that fall into the 61–90 day category.
2. Clean Claim Rate
Every claim that is denied costs time and delays payment by days or weeks. The industry standard is a clean claim rate of 95% or higher, with top-performing billing operations achieving rates of 98%.
The difference often comes down to pre-submission scrubbing, which involves identifying missing modifiers, invalid codes, and payer-specific requirements before the claim is submitted. This foundational work is essential for maintaining a healthy cash flow.
3. Denial Rate
Currently, denial rates in the industry have risen to 12–15%. High-performing practices maintain rates below 5%. This discrepancy represents a significant amount of revenue that practices either recover slowly or write off entirely.
Billing services can address this through two main strategies: prevention (eligibility checks, prior authorization tracking, accurate coding) and recovery (appeals, pattern analysis, and addressing root causes to prevent recurring denials). Both strategies are crucial, yet many practices focus on only one.
4. Net Collection Rate
This metric reveals the percentage of the revenue you are actually collecting. A rate below 90% indicates that you are leaving money on the table due to underpayments, missed charges, or unresolved denials.
Aim for a net collection rate of 95% or higher. Achieving this requires conducting charge capture audits, implementing automated underpayment detection, and diligently working accounts until they are fully paid, not just submitted.
5. First-Pass Resolution Rate
This metric reflects the efficiency of your billing process, measuring how often a claim is paid correctly on the first submission—without rejections, underpayments, or appeals. A low rate indicates that your billing staff is spending more time resolving issues than processing new claims.
Target a first-pass resolution rate of 95% or higher. Improving this metric often uncovers specific failure points that, once addressed, can lead to overall enhancements in billing efficiency.
6. Charge Capture Rate
This metric represents preventable revenue loss. You provided the service and documented it, yet it was not billed.
Missed charges often occur in ancillary services, supplies, and procedures that were documented but not coded. A billing service can help close this gap by reconciling clinical notes with submitted charges and flagging any discrepancies before filing deadlines.
7. Patient Collection Rate
Patients are now responsible for a larger portion of their healthcare expenses, with industry averages for collection rates on these balances ranging from 34% to 48%. This is not merely a billing issue; it is fundamentally a communication challenge.
Clear, comprehensible statements, accessible payment plan options, and proactive outreach before balances age into bad debt are essential. While these strategies are not revolutionary, many practices lack the systems to implement them consistently.
8. Claims Submission Speed
Medicare has a 14-day payment floor. Each day a claim remains unsubmitted adds to your payment timeline. Claims should be submitted within 24 hours of an encounter—this is non-negotiable.
The bottleneck often occurs at the transition between clinical documentation and billing. When these systems are integrated, delays are minimized. If they are not, manual data transfers can lead to errors and missed submissions.
9. Cost to Collect
This metric is often overlooked. If you are spending 10 cents to collect every dollar, it significantly impacts your operating margin, a detail that can be easily missed in monthly reports. The target should be under 5%.
Outsourcing billing does not automatically reduce this cost; however, a competent billing service can lower it by distributing technology and staffing expenses across a broader client base than any single practice can manage.
A Quick Reference Guide
KPI
Target
Primary Lever
Days in A/R
<30 days
Faster submission + follow-up
Clean Claim Rate
≥95%
Pre-submission scrubbing
Denial Rate
<5%
Prevention + appeals
Net Collection Rate
≥95%
Persistent A/R work
First-Pass Resolution
≥95%
End-to-end tracking
Charge Capture Rate
≥98%
Documentation audits
Patient Collection Rate
>50%
Clear statements + payment plans
Claims Submission Speed
<24 hours
Same-day processing
Cost to Collect
<5%
Process efficiency
Where to Start
Focus on the KPIs where your practice is furthest from benchmarks; this will be your quickest route to recovering revenue. If your denial rate exceeds 10%, that’s a critical issue. If claims are sitting for several days before submission, that should be your starting point.
A reputable billing service will establish baseline metrics before promising results and will provide regular updates thereafter. If they cannot inform you of your denial rate, that is a significant concern.
Neurology Billing Services integrates seamlessly with clinical documentation, which is crucial for improving metrics like clean claim rates and submission speed. This eliminates data re-entry and manual handoffs. When the provider completes the encounter, billing begins automatically. This structural improvement leads to sustainable enhancements—not just temporary fixes.
Curious about your clinic’s performance? Establishing a baseline RCM assessment is the first step.
Lemuel Areglo, CPC
is the Director of Revenue Cycle Management Services at WRS Health, bringing nearly 15 years of experience leading medical billing, coding, credentialing, and revenue cycle operations across the healthcare industry. Lemuel’s expertise spans the full revenue cycle, including claims management, denial resolution, payment posting, accounts receivable, and practice operations. He has extensive experience supporting specialties including neurology, psychiatry, physical therapy, pain management, internal medicine, orthopedic surgery, speech therapy, and sleep medicine.
